Zondo commission hears testimony about jet fuel supply agreements

The commission of inquiry into state capture continued on Friday, hearing aviation-related testimony when the chief risk officer of the Industrial Development Cooperation (IDC), Mark Phakamile Mainganya, took the stand.

The evidence leader at the commission, senior counsel Kate Hofmeyr, said Mainganya’s testimony would focus on jet fuel supply agreements between South African Express (SAX), South African Airways (SAA) and EML Energy.

Hofmeyr said according to previous testimony at the commission, procurement processes were not followed in the jet fuel agreement between SAX and EML Energy and that the agreement was entered into despite the fact that SAA was already supplying fuel to SAX, making the agreement with EML Energy a duplication.

Hofmeyr added that the agreement between SAX and EML Energy was 30% higher in cost than the one between SAX and SAA.

Furthermore, after EML was awarded the fuel supply tender it was never paid because it only refuelled and defuelled aircraft, at a cost around R80,000, which was significantly lower in pricing than the jet fuel supply tender, Hofmeyr said.

According to him, the board at SAA had set aside 20% for jet fuel supply transactions for identified parties and a process was undertaken to bring black industrialist in the jet fuel sector to supply the 20% set aside. EML Energy was one of three parties that were identified during this process, Hofmeyr said.

Despite being shortlisted, EML Energy was not awarded the tender initially in 2016 but was later appointed in 2018.

Hofmeyr said that in light of these contracts, EML Energy had applied for funding from the IDC, which it received, a matter which was investigated and would be explored at the commission on Friday.

Watch the proceedings live courtesy of the SABC:

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